Series 3 EpiSode 2: EpiUsers Podcast : The SaaS Reckoning, Ownership, Lock In and what's Next for ERP?

EpiUsers the Podcast
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In this EpiSode:

As ERP vendors continue pushing customers toward SaaS and cloud-first strategies, many organizations are asking an important question:

Are we gaining innovation, or giving up control?

In Season 3 Episode 2 of the EpiUsers Podcast, Jose Gomez and Bryan DeRuvo sit down with independent ERP analyst Eric Kimberling, Founder & CEO of Third Stage Consulting, for a candid discussion about the future of ERP, SaaS, cloud computing, AI, and the strategic decisions organizations face as the ERP landscape continues to evolve.

Together, they explore the opportunities, risks, and realities behind todayā€™s digital transformation initiatives and discuss whether the industry is solving the right problems for customers, or creating new ones.

The conversation covers:

  • The continued shift toward SaaS and cloud ERP

  • Data ownership and customer control concerns

  • Vendor lock-in risks and long-term business flexibility

  • The true cost of SaaS ERP over time

  • AIā€™s impact on ERP innovation

  • Platform ecosystems and low-code development

  • Best-of-breed versus all-in-one ERP strategies

  • What the next generation of ERP software may look like

  • How organizations can prepare for future disruption

Along the way, Eric shares insights from years of advising organizations on ERP selection, implementation, and digital transformation, while Jose and Bryan provide the customer perspective from inside the Epicor ecosystem.

Whether youā€™re evaluating a cloud migration, questioning vendor strategy, or simply trying to understand where ERP is headed next, this episode offers a balanced discussion of the challenges and opportunities ahead.

About Our Guest:

Eric Kimberling
Founder & CEO, Third Stage Consulting

Eric Kimberling is one of the leading independent ERP and digital transformation advisors in the world. Through Third Stage Consulting, he helps organizations navigate ERP selection, implementation, digital transformation, and organizational change management.

:link: LinkedIn: https://www.linkedin.com/in/erickimberling

:link: Website: https://thirdstage-consulting.com

Resources:

Also Available in the following platforms:

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Thanks to everyone who made this episode possible:

Hosts: @josecgomez, @bderuvo

Guest: Eric Kimberling

Producer: @josecgomez

Music by: @Chris_Conn

Sampled Music for Outro Track by: The Passion HiFi

Graphic Design / Concept by: @hkeric.wci

We hope you enjoy the episode and would love to hear your thoughts below. What are your views on SaaS ERP, vendor lock-in, AI, and the future of enterprise software?

If you have questions youā€™d like answered in a future episode, or suggestions for guests from the Epicor ecosystem, send us a PM or email us directly at podcasts@epiusers.help.

Weā€™re always looking for ideas, topics, technical deep-dives, customer stories, and guests from around the ERP community.

PS: We promised more episodes in Season 3. So far weā€™re actually keeping that promise. :smiling_face_with_sunglasses:

3

Thanks for doing these. I enjoy hearing other perspectives and the conversation that occurs.

4

I was pleasantly surprised to see a new episode on my feed this morning, it went straight to the top of the list for the morning commute.

The quality is excellent, well done.

5

Good episode. One suggestion for Epicor to get over the Onptem vs cloud is just proved a container version for on prem. Maybe I am oversimplifying, but based on the Linux document that used to be up on Epicweb it seems totally feasible. Maybe there are some cloud specific artifacts, but surely it is not too late to tweek that. They already have the production and non condition for bpms. It would be interesting to understand the differences.

6

Epicor has already said they are working on a Hybrid / container like version. Its what they said at Insights.

My current sticking point is simply the subscription model. I think it should be Magazine Style subscription.

As long as you pay your bill you get a new magazine (read Container / Image) every few months. You can read and use those ā€œMagazinesā€ you already paid for for ever.

If you stop your subscription you doā€™nt get more magazines (read Container / Image) but you get to keep the old ones you have, used ,old and crusty but workable in a pinch when you are bored on the :toilet:

They can also turn off auxiliary services like Prism etc sine that costs money on their side, but the CORE of the ERP / Image should remain working and usable. The customer gets the control and ownership they need, they keep their levers to relieve pressure (as needed)

Epicor gets their ā€œsubscriptionā€ style model, and they get a Single Deployment / Development path (read Container / Image) win win win.

7

Agree 100% on subscription adjustment, unfortunately the costs donā€™t stop for running the platform that has to be paid for somehow. Unless CMP gave the customer the capability to turn off instances that were not used like can do in Azure Portal the ruining costs donā€™t stop. The model is just not mature enough for that level of granularity, perhaps it has nit been considered maybe due to the whole Hotel Califory model that SaaS is addicted to so much.

Maybe the solution is for there to be a separate provision charge compared to the the module licenseing. Not sure if thatā€™s a thing already. That would clearly indicate what the true cost is for providing SaaS services.

My understanding with the current licensing is if you stop paying for a module and at a later stage require it again you need to pay from the time you suspended to be current.

A bit of a ramble so apologies, there has to be a better way I am sure we all agree.

The discussion around the traditional thoughts of not customising or minimal customisation only, was thought provoking.

8

Anyone else listen to their podcasts on fast speed? I had to turn that off for this one cuz Jose just talks at 1.4x speed anyway. Great show. I appreciate the viewpoints and discussion.

9

Goes for your user count as well. Weā€™re looking at reducing our user count for the last few years of on-prem. If and when we sign a new contract for cloud, weā€™ll be starting with a precise user count based on historical usage. Itā€™s always easy to add more when we need it.

10

I really appreciated the discussion around the ā€œcompartmentalizedā€ ERP consisting of several separate systems. One large connected system is nice but many niche softwares do their specific area better than competitors. And making them all plug and play nowadays is easier than ever. I could totally see that becoming more common.

11

I donā€™t disagree, BUTā€¦

in many scenarios, it is critical to be able to follow a transaction sequence. When your Purchasing, Receiving, Inspection, Inventory, Production, Shipping, and Finance systems are all separate systems joined by APIs or whatever, it will still be critical for an auditor 6 months later to reliably follow all the transactions. This is one of the reasons that an ā€œintegratedā€ ERP came into existence in the first place.

ā€œOne source of truthā€ is a thing.

12

I think when I said that a large connected system is ā€œniceā€ it really didnā€™t do justice to all of the problems an integrated ERP solves. I wasnā€™t around for the days before such a thing so I take for granted all the simplicity of everything connecting and talking. I have been a part of integrations, however, where we try to use Salesforce and Service Cloud (as examples) instead of Epicor. So I can see how the integrated ERP that tries to be everything to everyone can hit a point where sustaining that and making it all work for everyone smoothly becomes prohibitive.

13

Agreed, before Epicor (when I was not involved in this side of things here) I know that we used multiple systems for different purposes and 15+ years ago (when some things were still DOS based) not everything talked to each other. I think the sentiment that ERP is software built for no one really is true, it is built to the lowest common denominator, to be the jack of all trades, master of none.

I also agree that the single source of truth and a single pane of glass to view everything through has absolute value as well but the idea of a more compartmentalized approach, looking for best of breed for each area/task is also an interesting concept, particularly since so many things now have APIs, REST and services like (the underlying product name escapes me at the moment) Automation Studio so you can make things talk to each other in a lot of cases.

IMHO the really interesting questions with the compartmentalized route though are:

1)Does it allow for Joseā€™s ā€˜magazine subscriptionā€™ (which I love the concept of for the hybrid/container idea where Epicor is not taking on added cost by hosting it, once it is released the cost is relatively finite in terms of that) or ideally perpetual licensing or are you now just dealing with a hydra of SaaS subscriptions?

2)How much more does it cost to find the best for your use case, separate applications, not to mention the work integrating them (REST and other tools are great but there is still a cost to setting them up and depending on the way they work to using them as well).

Edit: Workato, that is the name I was reaching for.

14

As I mentioned above, I love the magazine analogy. Iā€™d take it a step further as well and look at the licensing model of Adobe CC vs DXO Photolab. Iā€™m sure most of us are familiar with the SaaS offering from Adobe where if you donā€™t pay you loose all access. DXO is a perpetual license but they release a new version every year-ish. They also traditionally allow anyone who has purchased within the past 2 versions a reduced rate to get the latest version, further back and you pay full price. That is what I would like to see Epicor do (I have full confidence they wonā€™t since it goes in the exact opposite direction of the recurring revenue model) but I donā€™t necessarily want every version, I want to be able to skip a version or two and not have to pay all the back costs of those versions just to get current. Anyways, #EndOfMyPipeDream I guess.

15

Canva has a subscription model where you keep all your IP that you created and can still access it and edit it but certain features are unavailable unless you have a current paid subscription. You can jump back in anytime when you decide you need those features again. Itā€™s not an ERP, but the simplicity and ease to users is second to none.

16

I completely (sorof) understand traditional SaaS ERP has a lot of Infra Costs so saying they must keep it active if I stop paying would be nonsense / unfair.

However a Hybrid / Container model reduces the Infra burden on them (significantly) so I personally would say going the Subcription model where you pay ā€œSaaSā€ prices so they get their ARR , but also in this Hybrid / Container model you get to keep the containers you paid for

There is no additional cost to them (infra), they get their ARR / same revenue, and they are free to cut off Costly Auxiliary Features (read PRISM). I think that compromise would give everyone a win and it is perfectly achievable. Granted it removes some of the power from the Vendorā€¦ but the power shouldnā€™t be 100% on their side right? Its a give and take!

Symbiotic relationship

17

Really couldnā€™t agree moreā€¦ but I donā€™t see any EXISTING software vendor having the courage to take this path. It will almost certainly have to be a new entrant into the field with a ā€œmarket disruptorā€ mindset.And that would be a good time for me to retire.

18

It would have to take a vendor that is confident enough in their product to allow their customers to leave, knowing that they are good enough that they wonā€™t want to.

One thing, however that hasnā€™t been talked about is original purchase price. SAAS doesnā€™t have an up front cost. The vendor wants to be able to recoup that (and more) with recurring revenue.

Didnā€™t original on prem purchases come with original purchase prices?

19

Sure you pay for the Perpetual License Up front and then maintenance.

20

System of record is 100% important. In some situations the business requirement of those few items that donā€™t fit right for particular processes, that gap is the challenge.

Build a module from scratch in a best if breed IDE and language , integrate with another tool or modify the incumbent and deal with the nuances, that sometimes do not reveal their wartz until after the factā€¦